A Chapter 13 of the Bankruptcy Code Provides an Advantage

question 36

Multiple Choice

A Chapter 13 of the Bankruptcy Code provides an advantage to the debtor by which:

• A) the debtor is not obligated to reveal all his assets.
• B) unsecured creditors are not recognized as valid creditors.
• C) the debtor can avoid the stigma of bankruptcy by getting an opportunity to pay the debts in installments under the protection of a federal court.
• D) the court does not appoint a trustee,as it relies on the good faith of the debtor for the settlement of all debts.

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Definitions:

Sunk Costs

Costs that have been spent and are non-recoverable.

Erosion Costs

Costs that occur when a new project or investment negatively impacts the revenue or profits of existing projects or investments.

Financing Costs

Expenses incurred by a company or individual in the process of raising capital through debt or equity.

Erosion

In finance, it refers to the gradual decline of an asset's value, or the negative impact one investment can have on the value of an existing investment.